Rodriguez & Doern PLLC Bankruptcy Blog
June 18, 2013
In the case of In Re: Bellafiore, Eastern District of New York, Second Circuit, in May 2013, Bankruptcy Court ruled the debtor could use his homestead exemption on the cash proceeds on the sale of his home prior to the bankruptcy filing. This means the fact that the debtor intended to vacate and sell real property does not change the fact that the real property was his permanent residence and his homestead, and he can exempt the proceeds in the bankruptcy.
On May 13, 2013, the U.S. Supreme Court in Bullock v. BankChampaign established a standard for defalcation in § 523(a)(4). The Court stated, “We hold that defalcation includes a culpable state of mind requirement akin to that which accompanies application of the other terms in the same statutory phrase. We describe that state of mind as one involving knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior.”
This standard now basically requires an intent element in order to prove defalcation in the non-dischargeability of debt in an Adversary Proceeding in Bankruptcy Court.
Social Security Blog
June 6, 2013
Volume 35, Number 4, April 2013 NOSSCR newsletter includes an analysis of Fact vs. Myth in social security cases. One of the leading theories for the increase in social security cases is the alleged abuse of the process recounted in many media reports, including the Wall Street Journal. The NOSSCR analysis tries to debunk the theory. The number of disability cases has risen in part because of the aging of the baby boomer population, or people born between 1946 and 1964. Older people are more susceptible to disabilities, and most baby boomers are now well into their 50s and 60s. The comprehensive analysis also details higher rates of disability linked to lower education levels. States with lower education standards have higher disability rates. People who receive disability insurance benefits undergo a sharp drop in living standards, which contradicts the theory that people seeking disability insurance are seeking some kind of payoff.
RODRIGUEZ & ASSOCIATES BLOG
BANKRUPTCY FILINGS DOWN
April 4, 2013
Bankruptcy filings continue to decline, according to the March 12, 2013 issue of Consumer Bankruptcy News. Filings in January 2013 declined by 10-percent compared to January 2012. American Bankruptcy Institute Executive Director Samuel J. Gerdano is quoted as saying that restrained consumer spending and lower interest rates have contributed to the decline.
RODRIGUEZ & ASSOCIATES BLOG
SLOW PACE OF FORECLOSURES
April 4, 2013
According to an article posted on CNBC.com dated March 7, 2013, foreclosures in New York State are being stalled by years due to huge foreclosure backlogs. In New York, the backlog could last as long as 607 months, which translates to approximately 50 years. New York and other states have judicial foreclosures, which require intervention by a judge. Additionally, New York, New Jersey, Massachusetts and other states have introduced policies to further forestall foreclosures in an effort to encourage workouts with lenders. States that have non-judicial foreclosures have a much quicker turnaround on foreclosed properties.
These cases reported in the February 2012 issue of NOSSCR, Volume 34, Number 2.
In a case involving residual functional capacity and medical issues, a District Court in North Dakota reversed the Administrative Law Judge for altogether failing to provide reasons why he rejected the opinion of the claimant’s treating rheumatologist.The court criticized the ALJ for improperly attempting to “play doctor” to reach his conclusion.The ALJ failed to provide any support for his finding that the doctor’s opinion was inconsistent with the record.
In the case of Ball v. Astrue 755 F. Supp. 2d 452 (W.D.N.Y. 2010) as reported in NOSSCR Volume 34, No.2, February 2012 newsletter, the Administrative Law Judge’s decision was remanded. In response to the ALJ’s final hypothetical, the Vocational Expert testified there were no jobs available if the claimant required unscheduled breaks. The ALJ still denied benefits, finding there were jobs the plaintiff could perform. The court ruled that since the Vocational Expert’s testimony is essential to a finding of a disability, the ALJ must have reasons for rejecting the hypothetical where there were no jobs available. The court reversed and remanded the case for a re-hearing with instructions that the VE be called to testify, and the ALJ present a hypothetical that accurately reflects all of the plaintiff’s impairments. The decision must outline why the ALJ either accepts or rejects the VE’s determination on each hypothetical.
As reported in the NOSSCR Social Security newsletter Volume 34, Number 2 dated February 2012 in case Papaleo v. Astrue, Northern District of Ohio, September 30, 2011, a District Court remanded an Administrative Law Judge’s failure to give proper weight to a treating physician. The ALJ failed to give controlling weight, claiming that the doctor gave a “subjective, favorable evaluation of Plaintiff so that Plaintiff could obtain benefits from the Social Security Administration.” The Court holds that this fact alone is not sufficient basis to conclude that the doctor’s opinion was biased and unreliable. The court continued that there was no evidence on record that they had a friendly relationship and directed on remand that the judge assess the credibility of the doctor.
An Acting State Supreme Court Justice in Suffolk County cut down Bank of America’s mortgage balance due to the conduct of the bank and apparently its attorneys. Bank of America was cited for repeated and persistent failure to comply with lawful orders of the Court, including those which directed the production of the servicing agreement. The litigation occurred over a 34- month period of time. The Justice ruled the bank acted, “wholly devoid of even so much as a scintilla of good faith in negotiating in good faith.” The bank was ordered to produce its pooling and servicing agreement and it took the bank nearly six months to produce the agreement. The bank’s attorneys indicated this agreement prohibited it from writing the loan down or negotiating. Once the agreement was produced, the bank’s attorney conceded that there was no absolute bar for principal reductions. The bank was ordered to pay the borrower $200,000.00 as a sanction, which would then write down the $493,000.00 mortgage.
This information is included in Volume 247, number 76 of the New York Law Journal dated April 20, 2012.
In order to deal with the shadow docket problem that has occurred in New York State, the New York State Court System has proposed a bill requiring an affirmation and certification at the initiation of the foreclosure lawsuit. The requirement would mandate the attorneys representing the bank or the mortgage company to file a certificate of merit with the complaint, with copies of pertinent financial instruments, including the mortgage, promissory note and assignments that would have to accompany the certificate. There would also be a requirement that the foreclosure action would have to be served within 20 days of filing, and proof of filing must be filed within 60 days. Intentional non-compliance of the requirement could result in dismissal by the court. The law’s goals are two fold: to make sure only meritorious cases are filed with proper documentation, and to assure that once the case is filed, they get to mandatory settlement conferences quickly. The bill is designed to deal with the shadow docket of cases that are filed but never reach the mandatory conference because the current only requires the following of an affirmation during the law suit.
This information is included in Volume 247, number 100 of the New York Law Journal dated May 24, 2012.